Mandy and a ‘German stitch-up’ on Vauxhall as deal puts 1,200 jobs at risk

By
Daily Mail Reporter
Last updated at 2:01 PM on 11th September 2009

Lord Mandelson was last night accused of allowing a ‘German stitch-up’ of Vauxhall that will lead to thousands of job losses and pose a threat to at least one British car factory. Vauxhall and its European sibling Opel were yesterday sold to a consortium headed by Canadian car-parts firm Magna, which has links to the Business Secretary’s friend Oleg Deripaska, Russia’s richest man. At least 1,200 of the 5,000-strong Vauxhall workforce face the axe as part of Magna’s restructuring plans, after the German government put up a 4.5billion loan to ensure that its bid was successful.
Facing the axe: About 1,200 of Vauxhall’s employees could lose their jobs
But the UK Government was accused of being too slow to get around the negotiating table. Magna said the UK would have to share ‘pro-rata’ in a 20 per cent reduction of Opel and Vauxhall’s workforce. Yesterday workers leaving Vauxhall plants in Ellesmere Port and Luton said they felt ‘devastated’ by the development
One union source said: ‘It does smack of a German stitch up. We have concerns. But we will be talking to the company and the Government.’ Union officials said the sale would preserve more jobs in Germany than in other European countries where U.S. car giant General Motors, which sold Vauxhall, has factories.

Although Magna says it is ‘committed’ to Britain and to keeping the Vauxhall name, key contracts for the company’s Luton van factory run out at the end of 2012 and Magna has given no commitment beyond then. The Luton plant employs about 1,500 workers, provides work for a further 500 in-house contractors and supports about another 4,000 jobs across the component and supply chain. The short-term future of the Ellesmere Port factory in Cheshire is more secure as the plant is gearing up production of the new Vauxhall Astra, which goes on sale in the autumn. Magna and Russian bank Sberbank are paying 500million for their joint 55 per cent stake in Opel and Vauxhall. The German government has consistently backed the joint bid, even threatening to withdraw billions of pounds of loans if it did not go ahead. By contrast, UK ministers led by Lord Mandelson had been pressing for a ‘ commercial’ decision to be made rather than one influenced by politics.
Fears: The threat of job losses at Vauxhall plants at Ellesmere Port and Luton has increased after GM sold its European arm to Canadian car parts firm MagnaBusiness minister Pat McFadden insisted the Government had been in ‘close contact’ with all parties, saying: ‘Our objective throughout has been to get the best possible outcome for the Vauxhall workforce and the production plants in the UK. ‘Magna have told us of their commitment to continuing production at both Ellesmere Port and Luton and we will work to make sure we get the best possible outcome for the UK.’ On a visit to Vauxhall’s van factory in Luton in July, Lord Mandelson expressed strong support for Magna’s rescue bid involving Deripaska  -  but he denies that he helped to ’stitch up’ the Vauxhall deal for his friend. His relationship with Mr Deripaska sparked controversy last year when, as an EU trade commissioner, the Business Secretary stayed on the billionaire’s 80million yacht off Corfu. GAZ boss Mr Deripaska’s role is as a key mover behind the deal. The Russian tycoon’s firm is the ‘industrial backer’ of the consortium which includes Magna and Russian lender Sberbank. Mr Deripaska was also, until last October, one of Magna’s biggest shareholders, with a 20 per cent share of the group. Lord Mandelson said yesterday: ‘I’m glad the immediate uncertainty about GM’s future has been removed. ‘We must now hope this GM/Magna/Russian deal will bring stability in the longer term.’ The Magna/Sberbank consortium said in a statement: ‘The consortium is committed to keeping open the Ellesmere Port plant where the new Astra will be produced and it has also committed to continuing production of the Vivaro van at Luton until 2013 at least. ‘Beyond 2013, when the contract with Renault is due to expire, the consortium is considering economically viable ways of keeping the Luton plant open.’ The bosses of consortium also expressed their gratitude to their supporters ‘including in particular the German government’.

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Dont forget he is still in the pockets of the brussels or else he will loose his pension, to many errors lately for me get rid of him.
- Lee, surrey, 11/9/2009 17:33

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Yesterday was an annoucement that GM had selected Magna from the bids, the company has not beed SOLD yet! only a memorandum of understanding has been agreed and there are many hoops yet for magna to jump through before a binding agreeement is made.
- Vauxhall worker, Luton beds, 11/9/2009 16:23

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Another backhander eh Mr Meddlsome?
- john, London (once was) Great Britain, 11/9/2009 15:57

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@Bill, Northumberland
Does British industry own any industries in Britain anymore?
probably not - most of them were got rid of during the Thatcher years!!
As for today’s story, at least we have some chance of some influence whilst we are in the EU. If we weren’t, as far as I can see, the loss of the jobs would have been guaranteed, because Britain by itself is not a big enough market.
The lessons of history and Geography all say that we must stay in the EU!
- cp, Kent Europe, 11/9/2009 14:01

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Does British industry own any industries in Britain anymore?
- Bill, Northumberland, 11/9/2009 12:58

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What else do you expect with Mandelson, he has only ever worked for himself .
I really can’t understand what he is doing making decisions that he is not cappable of doing for the country.
He was not elected by the voters so he should not be having anything to do with the running of the country, if Brown is not able of doing what he is paid for he must stand down.
Whoever gets in at the next election is not going to sort this mess out for many years.
Mandelson whent out of the govenment under a big black cloud before, he has now been alowed to come back for round two,
Margaret Solihull
- Margaret, Solihull West Midlands, 11/9/2009 12:52

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